German digital bank N26 has posted its first annual profit, reporting group net income of €1.6 million for 2025 compared to a €42 million loss in 2024. Revenue climbed 13 percent to €501.6 million while gross profit surged 33 percent to €350.5 million, driven by higher deposit income and expanded paying customer base. The turnaround was fueled by a 49 percent jump in net interest income to €166.3 million, representing 47 percent of gross profit, alongside fee and commission income that rose 21 percent to €184.2 million.
The profit margin remains razor-thin at 0.3 percent, leaving minimal cushion for error. Revenue-generating customers grew 16 percent to 5.6 million while deposits surpassed €10.5 billion as the bank offered instant savings accounts paying up to 4 percent. The milestone comes amid leadership instability, with new CEO Mike Dargan taking over in April following regulatory challenges and valuation declines from 2021 peaks.
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FXnCO Insight
** N26’s profitability validates the neobank model but wafer-thin margins mean any interest rate cuts or regulatory costs could quickly erase gains.
Source: Finance Magnates